OTTAWA — Conservative leader Stephen Harper said despite turbulence in the U.S. economy, the Canadian economy will weather the storm.

He suggested if Canada were going to experience a recession, it likely would have happened by now.

And he used the occasion of market turmoil to punch his message that Liberal leader Stéphane Dion's carbon tax plan is too great a risk at this time.

But Dion said as badly as the U.S. has performed economically, Canada has done worse and lays the blame for that at the feet of the Prime Minister.

Dion, while in St. John's, Nfld., said that Harper's economic formula is one that will land Canada in a deep recession.

"Their (the U.S.) first six months have been better than ours in terms of economic growth," Dion said.

"(Harper) made bad choices in the way he spends. He spent more than any other government before him," he said. "We've got to stop going in the direction that Mr. Harper is sending us and that is deficit and recession."

Harper urged "a more sober analysis" of the global economic woes.

People should not "turn to complete doom and gloom" scenarios, Harper said at a Monday news conference.

The Conservative party projects a slight budget surplus for this country, he said, adding that in fact government revenues are expected to be slightly better than forecast.

Harper said that while news today in the United States is "obviously not good" the fact is the "American economy has not crashed and not entered recession in all of this."

He said that he U.S. economy has "shown considerable resiliency from time to time" and nobody should "throw in the towel."

In Canada, Harper said the financial services and housing sectors are strong, and this country is unlikely to feel the same effects.

But Harper warned that Canada needs "continual managing of the slowdown in growth."

"Obviously this is a time that requires prudence...this is not the time for wild experiments in new taxes or grand spending schemes," he said.

New Democrat Leader Jack Layton said Canadian regulations have sheltered the economy from much of the storm below the border but more reforms to protect investors are needed.

"We are able to retain some confidence at this point in time in Canadian banks," Layton said at a campaign event at Dalhousie University in Halifax. "It appears that our more robust, regulatory strategy under the Bank Act has to date protected us to some degree, but I believe with what we're seeing in the risky practices that have been adopted south of the border that more steps are going to be needed here in Canada."

He said the Sarbanes-Oxley Act in the United States prevents the creation of two levels of shareholders, something the Canadian Bank Act does not have.

"In the U.S. you don't have these two levels of shares where a great many shareholders here in Canada may own shares but have no ability to really hold the administration to account," he said. "There are some reforms that we could be and should be looking at here in Canada that could help protect investors."

With files from Richard Brennan and Joanna Smith

More on thestar.com

We value respectful and thoughtful discussion. Readers are encouraged to flag comments that fail to meet the standards outlined in our
Community Code of Conduct.
For further information, including our legal guidelines, please see our full website
Terms and Conditions.